Factors RESULTING IN THE INTRODUCTION OF Dubai Economics Essay

Dubai is one of the major growing cities on earth, in conditions of investment and opportunities for job creation. It really is situated in the United Arab Emirates and it is the second major emirate by area. It is a financial hub which is popular for property purchases, financial service provision and tourism industry. Its global attention has been related to the investment opportunities as well as large sports events and impressive construction projects which include a seven star hotel in the middle of a water body. There are many factors which have resulted in the fast development of Dubai and these include infrastructural development, tourism, large jobs which take global attention, sports activities events yet others.

Although Dubai is continuing to grow in a comparatively short length, it encounters a downturn in recent times. This downturn has led to fewer opportunities in real property, decline in foreign workforce, and increase in sales of used cars, decrease in tourism and other factors. Essentially the most prevent factor because of this drop is the global economical crisis which slowed down its economic expansion. In addition, factors such as issues related to its workforce, especially overseas laborers have adversely afflicted its reputation. This newspaper aims at studying the factors that have led to the growth of Dubai in a comparatively short period of time. It will also address factors which have adversely affected Dubai recently, resulting in its fall season. The discussed issues will be summarized at the end.

Factors which led to the development of Dubai in a brief period of time

Infrastructural development

Any country cannot draw in investors if the infrastructure is not developed to meet up with the needs of investors. Dubai has invested big money on infrastructure and today boasts of having some of the best infrastructure on earth. Dubai's highway, air and sea network is well developed and this eases transportation in and around the town. Dubai boasts of an efficient metro rail, waterways, air carry and water move which appeal to its more than 5 million people populace. Its complexes and architecture are of top notch quality, with Dubai having the tallest building in the world. All these infrastructures are essential for investment plus they attract investors from different parts of the globe. Investment subsequently increases Dubai's financial development and development, and regardless of possessing oil, engine oil makes up about only 6% of Dubai's resources of foreign exchange, which ultimately shows the benefits reaped from investment in infrastructure (Carter & Dunson 56-63).

Tourism

Tourism is one of the main areas in Dubai, accounting for a big amount of foreign exchange received. There are various places of interest in Dubai and these include culture, architecture, shopping and more. Dubai has been nicknamed as the "City of gold" because of the many shops which deal with this valuable metal. They have over seventy shopping malls, plus some are among the largest on the planet. Furthermore, Dubai has many electronics shops, boutiques, supermarkets, departmental stores as well as others. Other tourist attractions include theme parks, skiing resorts, zoos, circus, tours, and buildings like the worlds' tallest among other destinations. Many tourists result from Africa, Eastern Europe and India. By 2015, Dubai tasks to acquire over 15 million vacationers annually, and this will translate to raised foreign exchange income by the UAE government. These earnings enable the government to help expand develop its infrastructure and achieve higher monetary expansion and development levels.

Political stability

Political balance is an essential factor which influences investment in any destination. Investors can only choose region when there's a fair expectation that the earnings on investment will be reaped. This may only occur if there is political stability. Politics instability helps it be difficult to returns on investment to be achieved since the factor of risk is very high. Dubai enjoys comparative political stability, which has driven its economic progress. The UAE is one of the most influential countries in the centre East and has relished political stability over time. They have close ties with other Arab areas and america. This makes it attractive to investors which is seen by the huge assets manufactured in Dubai, that have ensured that the town is continuing to grow within a comparatively short passage of time.

Trade liberalization

Trade liberalization is a macro-environment which features very few barriers to trade. Trade liberalization also features little interference on macroeconomic factors by the federal government. Trade liberalization is very important to investment since buyers have the ability to predict profits on investment with relative certainty. If they are able to do so, acquiring money is easier since money providers have the ability to asses the viability of the investment. There is certainly minimal interference in trade by the UAE authorities in Dubai, and this attracts potential traders. This is one of the reason why which makes Dubai a possible investment destination and has increased financial progress an development.

Factors which led to nov Dubai in recent years

Global economic crisis

The global crunch has adversely afflicted many countries and cities, and Dubai is no exception. The global downturn which started out in the US, spread to almost all countries of the world, with excellent investment vacation spots such as Dubai being amongst the most damaged. The real house sector and financial service sector was most afflicted with fewer ventures being made because the global economic turmoil begun. The global crunch also damaged consumers through cutting down their purchase vitality and this experienced an adverse effect of reducing sales and profitability of many sellers. The global crunch also made shareholders more cautious with assets and many were mindful in trading, with numerous others selling their investment funds at lower prices, immediately after the global crunch commenced. This had the effect of slowing down the stock exchange, which adversely affected the market, which thrives on investment. The totality of the global turmoil effects was reduced amount of investment, lower purchase vitality of consumers and caution by traders when spending, and all these reduced economic expansion and decreased revenue received by the federal government.

Negative issues associated with workforce

There has been a lot of negative publicity regarding the treatment and living conditions of the Dubai workforce. It has been a significant issue over the years, and several human being rights teams have raised concern over the treatment of staff (Ali 34-39). Many of the workers who have problems with human rights abuses are international workers who've little effect in plans which govern employees in Dubai. Furthermore to moving into pathetic conditions in terms of cover, some employers have been known to exploit employees and make sure they are work with no pay. International employees such as home servants have been known to have their passports confiscated, making them helpless against their abusive employers. The bulk of these accusations have the effect of destroying the reputation of Dubai especially in the eyes of investors. Investors, especially people that have strong human rights beliefs, withhold investment in Dubai because of this, which adversely affects the growth and development degrees of the current economic climate.

Fall of oil prices

Although Dubai depends hardly any on essential oil as a way to obtain revenue, the fall of engine oil prices has direct effect on this city. The United Arab Emirates as a whole relies on essential oil as the major source of foreign exchange. Due to fluctuations in engine oil prices, the government has reduced investment on infrastructure and other essential services which are crucial for attracting shareholders. This has got a negative effect on investment in Dubai and other parts of the UAE. Upsurge in engine oil prices will permit Dubai get more revenue from the UAE authorities for development purposes, that may increase investment and economical growth.

Summary and conclusion

Dubai has been analyzed at length as a tourism and investment vacation spot in the UAE. Dubai has development over time scheduled to investment, but is not intimidating to fall scheduled to various factors which have been discussed. The progress in Dubai was necessitated by tourism, investment in infrastructure, politics stableness and trade liberalization. Nov Dubai can be attributed to the global financial crisis, poor treatment of the overseas workforce and reduced amount of oil prices. For the UAE federal to come back Dubai to the global investment destination it was, it should address the mistreatment of foreign workers in the city. It will also pump cash into the Dubai economy in order to stabilize it and catch the attention of confidence from traders. Finally, appropriate fiscal and monetary policies will activate economic progress and development.

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